Politics, Economics, and Evolution

By Arnold Kling

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Some see the social world as just too complex to be successfully explained in terms of simple and general principles. Others, in a more radical way, state that human meanings or beliefs belong to a special domain of cultural things, which is forever closed to scientific explanation… the best way to counter these conceptions is simply to demonstrate that there are indeed scientific explanations for particular social phenomena.

—Pascal Boyer, Minds Make Societies

In Minds Make Societies,1 Pascal Boyer makes the case that our individual habits and cultural practices rest on a cognitive foundation that evolved during the hundreds of thousands of years when we struggled to survive in small bands. That period I will refer to as the formative era. Those cognitive instincts shape our inclinations in economics, politics, and sociology. But because the modern environment differs from that of the formative era, we must sometimes make the effort to correct our intuition.

Although Boyer does not discuss diet, I believe that diet can help to illustrate his thesis. Our taste for high-calorie foods evolved in response to an environment in which there was at best a slim margin between the calories that we consumed and the calories that we expended in obtaining food. Under such circumstances, it was an advantage to recognize and ingest high-calorie foods. The survivors were humans who developed a taste for such foods. But in the calorie-abundant world in which we find ourselves today, we need to tame our appetites.

One of Boyer’s examples is the spreading of rumors, or “fake news” in the current lexicon. In the formative era we were faced with imminent threats, particularly from predatory animals. This gave a survival advantage to people who could recognize and communicate about threats. Our individual and social threat-detection systems became very powerful.

As individuals, we are “faster and better at identifying a spider among flowers than a flower among spiders.” Socially, “people find the authors of descriptive texts, for example, about a computer program or a hiking trip, more competent and knowledgeable if the texts include threat-related information.”

This reminds me of a classic fairy tale in which Henny-Penny says that “the sky is falling,” spreading a false rumor. This is consistent with the thesis that we have evolved to attend to threats. Had she made a more benign pronouncement, such as “I see a rainbow with polka-dots,” Henny-Penny would have encountered at best indifference, and at worst heavy skepticism.

“Although the story of Henny-Penny and the story of ‘The Boy Who Cried Wolf’ warn us away from those who issue false threats, we still attend to people who make dire forecasts, even when their track records are poor.”

Although the story of Henny-Penny and the story of “The Boy Who Cried Wolf” warn us away from those who issue false threats, we still attend to people who make dire forecasts, even when their track records are poor.2 There continues to be a large audience for stock market ultra-bears and environmental catastrophists.

Our evolved tendency to focus on threats may explain why news outlets focus on stories that disturb and frighten their audience. Politicians also find that articulating threats can help attract followers.

Another feature of social communication is what Boyer calls moralizing. Effective coalitions involve coordination. Boyer says that the need for coordination gives an advantage to would-be organizers who describe problems in simplistic moral terms:

A moralized description of a situation is likely to result in coordinated opinion, more so than other possible understandings of what is going on. People tend to condemn the party they see as the transgressor and side with the victim, partly because that is also the choice they expect others to make.

If I say that the financial crisis of 2008 was caused in part by regulations that lowered bank capital requirements for mortgage-backed securities, it is difficult for you to predict how many people are likely to agree with my explanation. It is much easier to coordinate around an explanation that blames “greedy bankers.” As Boyer puts it, “stating that someone’s behavior is morally repugnant creates consensus more easily than claiming that the behavior results from incompetence.”

Boyer includes a chapter on our ideas of social and economic justice. He points out that humans are better than other species at cooperative behavior.

The unique feature of human cooperation is that it extends so easily to individuals beyond one’s kin, and in large groups, even to individuals one does not really know at all.

He goes on to say that

… people who cooperate… are following social norms that include an aversion to inequality and a preference for prosocial behavior in oneself and in others… prosocial behavior could be stabilized, in human groups, by punishment… punishment could ensure the transmission and stability of any kind of behavior.

In game-theoretic terms, we build stable social norms by rewarding cooperators and punishing defectors. But rewarding cooperators and punishing defectors is costly. In fact, Boyer points out that in a modern society,

You do not pursue thieves and muggers yourself but trust the police and the justice system to mete out appropriate sanctions… these institutions appeared very recently in an evolutionary timeline. And they only appeared when the size of the communities lowered the cost of third-party enforcement. Paying your taxes to support law enforcement is much cheaper than hiring your own police force.

That last sentence suggests that anarcho-capitalism might be expensive relative to state-provided law enforcement. Of course, one must be careful, because in principle competition always seems wasteful relative to monopoly, but in practice competition is better at holding down costs.

Boyer argues that in the formative era, we knew the people with whom we were dealing, we had repeated interactions with them, and we communicated with others in our group about our experiences. As a result, people who maintained reputations for honesty and trustworthiness would benefit from more trade with others. Personal reputation in a context where interaction is repeated and norm violations are reported plays a key role in our instinctive system of cooperation.

Boyer argues that our understanding of fairness, inequality, and ownership are natural and intuitive. They are based on people’s perceptions of luck versus effort in economic activity.3

Boyer points out that because our intuition about trade comes from a formative era of repeated interactions, this affects our view about what is a “fair” price. He writes,

The person who usually trades arrowheads for your honey will not try to jack up his price if he knows you have run out of arrowheads, because he wants to keep you as a partner in the future.

No matter how firmly economists believe that charging a higher price for supplies during an emergency is efficient, from the repeated-interaction point of view the seller is engaged in “price-gouging” and should be punished. Our instinct is that the seller should no longer be considered a desirable partner with whom to exchange in the future.

The formative era did not equip us to understand that market prices are determined by market forces in general and competition in particular. Instead, Boyer writes that our most natural

… assumption is that prices are determined only by bargaining power… The notion is that prices favor the “stronger” or “bigger” partner at the expense of the other. For instance, when we are told that such-and-such company “controls” a very high share of a market, many people conclude that the business in question can impose whatever products or prices it chooses on the consumer. Economists would point to the fact that apparently powerful corporations are, in fact, perpetually threatened by consumer choice… But the power of consumers only exists in the aggregate, which makes it invisible to individual customers.

Boyer says that in small-scale societies, we learned to judge people by their apparent concern for our relationship:

Before mass markets it was highly efficient to infer outcomes from intentions. That is, the terms of exchange were much more likely to be beneficial to us in the long run, if the partner appeared to be motivated mostly by the desire to establish durable, mutually advantageous interaction with us. By contrast, if the only information available was that the partner was trying to maximize his own benefits, that would signal the kind of interaction we should avoid.

Even today, as consumers we are loyal to particular manufacturers and retailers, in part because we treat them as caring about an ongoing relationship. But judging intentions rather than outcomes can be hazardous in the modern world.

Concerning economic inequality, Boyer writes,

… the economy or society as a whole is construed as a gigantic collective action, to which everyone contributes in one way or other, and from which they may receive rewards.

… humans do not generally believe that any individual’s contribution could possibly be hundreds or thousands of times greater than anyone else’s.

This reinforces the instinct that economic inequality must be derived from power rather than from merit.

In a modern economy, we do not observe many of the processes involved in providing us with the goods and services that we consume. Our intuition is to take these processes for granted. Boyer writes,

If a great deal of production is just given—to be more precise if some of our cognitive systems take it as given—then it is bound to activate the intuitive systems concerned with communal sharing. That is because a good part of the available goods and services are mentally processed as a windfall, as something that is clearly there, but whose origin is simply not represented.

There is much more to Boyer’s book, including chapters on religion and on the family. But I found the chapter on economics and our ideas of social justice to be particularly convincing. It turns out that, although his name does not appear in the index, research over the past 50 years or so has confirmed Friedrich Hayek’s belief that human intuition was formed to deal with a more primitive environment.

*Arnold Kling has a Ph.D. in economics from the Massachusetts Institute of Technology. He is the author of several books, including Crisis of Abundance: Rethinking How We Pay for Health Care; Invisible Wealth: The Hidden Story of How Markets Work; Unchecked and Unbalanced: How the Discrepancy Between Knowledge and Power Caused the Financial Crisis and Threatens Democracy; and Specialization and Trade: A Re-introduction to Economics. He contributed to EconLog from January 2003 through August 2012.

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